Unpacking DeFi Fund: How It Supports the Next Wave of Decentralized Finance

Summary

• DWF Labs launched the DeFi Fund to target projects built on real utility, not current cycle narratives. The fund focuses on DeFi’s permanent primitives: liquidity infrastructure, money markets and sustainable yield, where adoption compounds and advanced solutions matter.
• In the funding process, DWF Labs follows the “proper partnership” incubation model: support for DeFi projects extends through post-TGE execution.
• RWAs are poised to ensure quality collateral and yield, while DeFi will be utilized for strategies and composability, hence, RWA infrastructure also fits DeFi Fund’s investment thesis.

Crypto cycles used to feel predictable: Bitcoin moves, altcoins follow, and narratives do the rest. DWF Labs’ Managing Partner Andrei Grachev argues that playbook is breaking, and that is the real reason behind the launch of the $75 million DeFi Fund.

With Artem Tolkachev (Chief RWA Officer at Falcon Finance) joining alongside Grachev, the talk, hosted by VP of Marketing at DWF Labs Diksha Sharma, focused on how the new initiative is supposed to support decentralized liquidity infrastructure, help launch new money markets and yield sources, and the role RWAs may play in making DeFi more institution-ready.

This Crypto Market Cycle Is More Complex

Grachev pointed to a structural shift: Bitcoin can rally without pulling the rest of the market up with it. That divergence, he argued, weakens the old assumption that every market upswing naturally lifts all boats.

Diksha Sharma built on that, saying that markets don’t fix themselves with narratives but with capital and utility. She framed the way out of “price-only” cycles as creating real infrastructure projects, attract real users and get real money flowing in the market.

The DeFi Fund is positioned as a vehicle to back projects that can generate durable usage and liquidity rather than relying on broad “cycle beta” to lift everything.

The Need for Permanent Primitives

Currently, DeFi sits in the market’s permanent core, Andrei Grachev believes. This includes trading protocols, investment, payments, yield and money markets. Teams are more experienced and more selective than five years ago, while crypto venture capital is tighter. Thus, founders need deeper support and more advanced solutions.

This is why DWF Labs decided to concentrate capital through the DeFi Fund to focus on supporting certain protocols with durable primitives: money markets, yield-bearing products, crypto perpetual DEXs and liquidity infrastructure where adoption compounds and where advanced solutions are part of a competition.

What Web3 Founders Really Need from an Investor

Building on Grachev’s point, Artem Tolkachev added that product alone doesn’t win. Instead, the hardest part is timing, liquidity, and distribution. He described DWF Labs’ value for builders as market intuition and traction support. He also pointed to the compounding power of early traction: when you’re building something like a collateral engine or stablecoin, liquidity itself becomes a trust signal.

With DeFi Fund, DWF Labs aims to back teams with credible products, and pair them with go-to-market leverage. In Tolkachev’s framing, the game-changer of launching this investment program isn’t just funding: it’s guidance and deployment muscle that helps protocol developers attract liquidity, build trust, and fit the cycle at the right moment.

Incubation Done Differently: The Proper Partnership Model

As the conversation moved into incubation, Grachev outlined three incubator archetypes, rejecting the first two:

• the factory model that launches constantly with low margins;
• the shallow financial-player model (tokenomics advice, plus cash and fees). 

The last model he advocates is deeper: it’s a “proper partnership” with the founding team, aligned on direction and goals. This approach is followed by DWF Labs.

Grachev's reasoning is practical: money is easy, everything else is hard. He listed what founders actually struggle with: users, long-term clients, attention, marketing, token launches, and especially the cliff after token generation events.

The DeFi Fund is the example of a “proper partnership” incubation model: it backs teams not just to launch, but to keep building through the post-TGE phase where real fundamentals are tested.

What “Funding-Ready” Looks Like

Moderating the conversation, Diksha Sharma raised a question many builders ask: can you apply for crypto venture funding without a working product? Grachev’s answer was straightforward: almost any stage can be funded, but the team must be able to build an MVP using internal resources.

He gave a concrete example: a founder proposing an RWA framework can be compelling if they have legal experience and a team that can deliver smart contracts, because then DWF Labs, as a VC partner, can help scale that project. Sharma added the need for innovation and “skillset match,” warning against simply repeating what worked four years ago. 

This underscores one of DeFi Fund’s eligibility criteria: builders who can ship, so its capital and support amplify momentum rather than substitute for missing product capability.

RWAs Can Drive the Next Phase of Growth for DeFi

All speakers agreed that RWAs come up as a potential catalyst for DeFi’s next phase. RWA infrastructure for decentralized finance is one category that the DeFi Fund could support. 

Artem Tolkachev explained what bridges those two currently distinct worlds. As asset tokenization moved beyond theory in the last couple of years, on-chain real-world assets can serve as quality collateral and yield source, while stablecoins keep being a settlement layer, and DeFi provides strategies and composability. 

The real constraint isn’t just tech, it is rails: regulation, custody standards, distribution, and institutional settlement moving on-chain.

In other words, RWAs will be a fuel for DeFi’s core categories: collateral, yield, and money markets, because higher-quality collateral and clearer settlement rails can make DeFi more stable and institution-friendly. That makes RWA infrastructure builders a perfect fit for DWF Labs’ DeFi Fund.

Closing Thoughts

The conversation’s message is that the next phase of crypto won’t be won by narratives alone. It will be won by teams building long-term DeFi primitives: liquidity infrastructure, money markets, and sustainable yield products, while paying attention to timing, distribution, and real demand.

That’s what DWF Labs bet on by launching a new investment program for DeFi: provide funding for what persists, back teams that can build on their own, and help projects capture liquidity when the market turns, because in a complex crypto cycle like this one, only fundamentals keep compounding.